5 Top Stocks for Your Starter Portfolio

A well-rounded, diversified starter portfolio includes top stocks such as CGI Group Inc. (TSX:GIB.A)(NYSE:GIB).

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Beginning an investment portfolio is an overwhelming task at any age. The questions that one must answer, or at least have an informed opinion about, are endless.

Which areas of the market are most attractive at this point in time? Within these industries, which companies are the most attractive? What is more important; growth or valuation? What is the healthy trade-off between the two? And lastly, how much of the portfolio should we keep in cash?

Here are five top stocks to put in the equity portion of the portfolio.

Dividend stocks belong in every portfolio, and with National Bank of Canada (TSX:NA), we get a 3.76% yielder that has big exposure to rising interest rates and a restructuring program that has seen significant efficiency gains.

The company’s efficiency ratio improved by 230 basis points in the last quarter, and its ROE was 18.3%. The company’s ROE was 15.5% in 2016, so the improvement is clearly massive. We can expect this year to see more of the same, as the bank continues to close the gap between it and the more established banks, such as Canadian Imperial Bank of Commerce.

With $10.8 billion in revenue, CGI Group Inc. (TSX:GIB.A)(NYSE:GIB) is Canada’s largest Information Technology (IT) services firm. The company has and will continue to grow by consolidating the industry and by growing organically, as the IT services industry is a growth industry.

At this point in time, CGI still has a big opportunity to continue along its growth trajectory, with a focus on higher-margin business further increasing the company’s margins over time. In the latest quarter, adjusted EBIT margins were over 15%. This is a long way from margins of under 10% only four year ago.

Agnico Eagle Mines Ltd. (TSX:AEM)(NYSE:AEM) stands to benefit from a shift in investor sentiment toward more stable, risk-averse investments such as gold. That’s in addition to its operational excellence, solid growth profile, and attractive valuation.

Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) is special, because it offers a long-life, low-decline portfolio, and oil and gas assets that have given the company a predictable and reliable stream of cash flow with little reserve-replacement risk.

This means investors get exposure to the sector’s upside, while mitigating the downside risk.

Finally, we have Enbridge Inc. (TSX:ENB)(NYSE:ENB), a pillar of stability, reliability, and capital preservation.

Since 1996, investors have enjoyed 22 years of dividend increases, with a 33% dividend increase in 2015, a 14% increase in 2016, and a 15% increase expected in 2017. And management expects the dividend to increase at a 10-12% cumulative average growth rate from 2017 to 2024.

Lastly, there’s the question of cash. Personally, I am keeping a greater than normal amount of my portfolio in cash, as I believe that there will be market weakness in the near term and better deals ahead.

Should you invest $1,000 in Agnico-Eagle Mines Limited right now?

Before you buy stock in Agnico-Eagle Mines Limited, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Agnico-Eagle Mines Limited wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Karen Thomas owns shares of Canadian Natural Resources, CDN NATURAL RES, and CGI GROUP INC CL A SV. The Motley Fool owns shares of Enbridge. CGI Group and Enbridge are recommendations of Stock Advisor Canada.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

3 colorful arrows racing straight up on a black background.
Dividend Stocks

These Are the Highest-Yielding Stocks on the TSX Right Now 

Let’s look at some of the highest-yielding stocks on the TSX right now and see how you can make the…

Read more »

rail train
Dividend Stocks

Canadian National Railway: Buy, Sell, or Hold in 2025?

CN is down more than 20% in the past year. Is CNR stock now oversold?

Read more »

Canadian Red maple leaves seamless wallpaper pattern
Dividend Stocks

5 Stocks for Canadian Dividend Investors

Given their solid underlying businesses, reliable cash flows, and healthy growth prospects, these five Canadian stocks are excellent buys.

Read more »

Woman in private jet airplane
Dividend Stocks

2 Bargain Stocks to Buy While They’re Still Cheap

Long-term investors looking for bargains should take a closer look at these two solid dividend stocks.

Read more »

analyze data
Dividend Stocks

Take Full Advantage of Your TFSA With These 5 Dividend Stars

These TSX stocks pay good dividends that should continue to grow.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

TFSA: Invest $25,000 in This TSX Stock for $1,966 in Annual Passive Income

Whitecap Resources is a TSX dividend stock that offers you a tasty dividend yield in 2025, making it attractive to…

Read more »

investor looks at volatility chart
Dividend Stocks

Sell-Off Survivor: Why This Canadian Stock Is a Must-Own in Volatile Times

There are few sectors that offer the security as well as growth as infrastructure, and this global powerhouse is a…

Read more »

A child pretends to blast off into space.
Dividend Stocks

Trump Tariffs: 1 TSX Stock That Could Take a Huge Hit

Cargoget (TSX:CJT) is vulnerable to Trump tariffs due to extensive involvement in cross-border trade.

Read more »